DB Offered to Sell a Cap for $10

question 52

Multiple Choice

DB offered to sell a cap for $10. Dan said no to the offer. After checking on eBay, and learning that the hat was worth $100, he called DB, said he changed his mind and he would buy the hat for $10.​

• A)There is a contract for the sale of the hat for $10.
• B)There is only an offer by Dan for the purchase of the hat for $10.
• C)There is no contract because Dan revoked the offer.
• D)There is no contract because DB revoked the offer.

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Definitions:

Long-run Total Costs

The total costs incurred by a firm when all inputs are variable and can be adjusted.

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Long-run Average Total Cost

The average cost per unit of output when all inputs, including capital, are variable, analyzed over a period when all factors of production can be adjusted.

Economies of Scale

The cost advantage that arises with increased output of a product, resulting in a decrease in the per-unit cost as the scale of production is enlarged.